Yank , I am sure you understand that Preferred Stock is not the same as debt. It's not an obligation in figuring net worth on the balance sheet.
Argument dismissed!
Any dividends can be passed at the discretion of the board without putting the corporation in bankruptcy. If you are going to call the sr pfd obligations
a liability , what about the jr pfd obligations? The sweep does nothing for the jr pfd , so I guess receivership is still required.
Remember it's the government that claims there was no "loan", there was an investment (ie - equity). Non payment of preferred stock dividend does not require receivership. Although the government will soon claim that the Preferred stock can be both equity and debt in the same the same way that Fha can sometimes be private and sometimes be part of the government.
Even if they take care of the jr pfd, what about the common dividends? Is that not a liability according to the logic of your post? Does that mean that the common stock must get part of the sweep earnings or the Gse's must be put in receivership?
Final question. Is there any prohibition in Hera saying the Fha may not or shall not declare the sr dividends a loan and paid in full( since according to you they are sometimes a loan)? They then liquidate the remaining assets paying out everything to common and jr pfds. Clearly , the fha ( according to you) has no implied duty even to the taxpayers either! They can do whatever!
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